Track Economics

Track Economics

Editorial | February 26, 2016 8:49 pm

The economics of the Railway budget are embedded in indifference rather than populism ahead of assembly elections in five states. There is no effort to address the fiscal mess, nor any to mobilise resources. True Suresh Prabhu&’s budget has stopped short of the extravagant and the fanciful; there is for instance no reference to the “bullet train”, that was promised by the Prime Minister last year, or even the proud boast of new carriers across the country. The implicit message must be that the tracks have ceased to be suitably robust to withstand any more. To the minister&’s credit – and so very unlike some of his predecessors – he has not played to the provincial gallery by introducing new trains in his home state. That said, the budget betrays scant concern over the 1.5 per cent decline in passenger traffic and a meagre one per cent growth in the volume of freight, not to forget the Rs.15,744-crore shortfall in revenue earnings in the current fiscal. Three new freight corridors are to be created, including two in the important railway junction of Kharagpur. The proposal can be contextualised with the expanding use of road transport. With no increase in fares and freight – the customary praxis of the Congress, Trinamul and BJP – the resort to cross-subsidy might continue for sometime yet.

The middle class attraction for air travel is one major factor that has seemingly influenced the proposals. A fully air-conditioned service; a Wi-fi enabled train that will run at a speed of 130 km per hour; and overnight double-decker trains on the busiest routes are without question intended to attract potential passengers who prefer low-cost airlines or book in advance to buy tickets on the cheap. There is a distinct focus on passenger convenience with the plan to introduce long-distance super-fast fully unreserved express trains. But whether the Railways will be able to dispel the dominant impression of “cattle-class’ (unreserved) travel will hinge almost entirely on the operational efficiency of the new embroidery. Not wholly unrelated are the chronic aberrations of water scarcity, filthy toilets, and as often as not meals that are scarcely fit for consumption.

The economic aspect cannot readily inspire optimism. It is all very well to announce that capital expenditure will be doubled to Rs.1.21 lakh crore, but the pledge must beg the question on the source of funding. Not least because the Centre has capped gross budgetary support to the Railways at last year&’s level of Rs.40,000 crore. Furthermore, there has been a progressive decline in the “internal surplus”, which is the excess of earnings over expenditure. No less a matter of concern is the “operating ratio”, which has been pegged at 90 per cent, up from the projected 88.5 per cent last year. It is an irony of Railway economics that lower the figure, the higher the level of efficiency. Altogether an uninspiring exercise.